Why your high cell phone bills have nothing to do with the size of Canada

Canada’s broken cell phone market has come under a lot of public scrutiny of late, with the Canadian Radio-television and Telecommunications Commission trying to establish a set of minimum standards for wireless providers; the release of OpenMedia.ca’s citizen-powered report, Time For An Upgrade, which demonstrated the systematic mistreatment that cell phone users suffer due to this dysfunctional market; and Industry Canada minister Christian Paradis coming under pressure this week over Big Telecom’s bid to take over scarce wireless resources meant for new independent providers.

In the face of all this critical opposition, Big Telecom has been unwavering in their defense of their practices, insisting that there is no problem with three providers—Bell, Telus, and Rogers—controlling almost 94 per cent of the cell phone market. A common straw man that Big Telecom uses to justify high prices is that Canada is just bigger than other countries, which we are led to believe somehow necessitates more costly services. The truth is, it’s the lack of fair access to independent providers that is the primary driver of high prices.

More specifically, Big Telecom lobbyists assert that: 1. Because Canada is a big country it requires a bigger (and more expensive) digital infrastructure, and 2. Because Canada’s population is so spread out across the country (it has a low ‘population density’), fewer people condensed in an area means fewer customers to cover the cost of that infrastructure.

While these claims seem logical, on closer inspection they don’t hold water, suggesting that population density is a convenient but flawed excuse used by Big Telecom to allow them to keep price gouging Canadians.

Canada’s geographical size does NOT increase the cost of cell phone service

There is little doubt that large countries are expensive to service. However research from technology consultants The Seaboard Group argues that “Canada’s carriers do not actually provide coverage across 90 per cent of the land mass” and that “[s]ome estimates suggest that the coverage is actually less than 20 per cent of the geography.” As wireless providers are only serving a percentage of this geography, in reality the total size of Canada will have little bearing on service costs.

The fact is that while Canada is a large country, its population is largely condensed in the south. We have a large land mass and relatively small population, but we have extremely high urban density. Not only this, but a very large proportion of our population is settled in a very small number of large cities. Statistics Canada reports that in 2011 over 53 per cent of Canadians lived in the top 10 biggest metropolitan areas in Canada.